…Jordan says growth highest recorded since 2014
–rice, construction and tourism responsible for performance
FUELLED by the investments in the new oil and gas sector and the performance of traditional industries, the local economy continues to grow and has recorded positive economic growth of 4.7 per cent for 2019, the highest domestic growth since 2014.
While there has been positive growth from 2015, economic growth has been cumulative since 2017, moving from 2.1 per cent in that year to 3.8 per cent in 2018 and to 4.7 per cent last year. The growth recorded last year was more than the projected 4.6 per cent.
“The 4.7 per cent growth that we had last year was in spite of poor performances of sugar and bauxite…sometimes the negative reports overshadow what is positive,” said Minister of Finance, Winston Jordan, as he shared the ‘positive’ performance with investors and officials during the sod-turning exercise for the Hilton Hotel, aback Ogle, on Wednesday.
Guyana has been dependent on the performance of a few commodities over the years, but Jordan said there seems to be a shift in this dependence, since the positive growth was due to successes in the rice, construction and tourism industries.
The ability of those sectors, to fuel economic growth, shows that the economy has been moving away from traditional products and into a new direction.
“We need to recognise the performance of those sectors…it comes on the heel of positive performances in spite of yearly challenges…Guyana continues to grow and with the exception of the year we had one per cent growth, every year we had growth in excess of three per cent,” said Minister Jordan, noting that this performance was as a result of the A Partnership for National Unity and Alliance For Change (APNU+AFC) Coalition government’s strategic plans and investments.
The minister said government had established a regime that will be attractive enough to both local and foreign investors. Investments have been continuous over the past year despite the current political conditions.
Jordan said investors have flooded the local market despite the political conditions and this, he said, is surprising because investors like political stability and they would often wait for the “dust to settle.”
“I am, however, happy that we are attracting investors…as you look around you can see development and continued investments…those features are all around, 10 days before elections,” said the minister, adding that it shows that the coalition government has laid the foundation for investments to flow.
In pointing out some of the recent investments, the minister said the sod was recently turned for the construction of Hilton and AC Marriott hotels at Ogle; and First Bauxite will be opened today at Bonasika.
Chief Executive Officer (CEO) of the National Industrial and Commercial Investments Limited (NICIL), Colvin Heath-London, also highlighted some of the impending investments during his remarks at the sod-turning exercise.
Heath-London said prominent Guyanese businessman, Danny Shaw, who was responsible for the Windsor Estate Providence development, will soon turn the sod for the Windsor Estate East Coast Development.
Additionally, local Cardiologist, Dr. Mahendra Carpen, is leading a group of Guyanese doctors who will be investing in a state-of-the-art specialty hospital complex, which is geared at offering several specialised services. Some of the services which will be offered are cardiac, cancer and urology, all geared at ensuring that Guyanese are no longer forced to seek certain specialised treatment abroad.
“This certainly is a testimony that NICIL continues to deliver…it reinforces the point that Guyanese investors are continuing to have a part of the pie,” said Heath-London.
Heath-London’s point about benefits for locals was reinforced by Minister Jordan, who said none of those projects will utilise taxpayers’ money.
“We are not taking taxpayers’ money and building hotels and borrowing loans that attract commercial interest, to build hotels…this was the case with the Marriott Hotel under the previous administration, when they sold off the profitable shares in GTT, borrowed US$30M from Republic Bank and used taxpayers’ money,” said the minister, adding that the coalition government inherited the bill and it is taxpayers’ money that is repaying the loan.
Jordan said such a model is not one which the coalition government will replicate, and they will instead create conditions to ensure that businesses make profits, but at the same time establish regulations that will protect the environment, protect workers and grow the economy.
New York-based stock market, NASDAQ, had listed Guyana as the fastest growing economy in the world. According to NASDAQ, Guyana’s projected growth rate from 2018-2021 is 16.3 per cent.
The stock market said that with a Gross Domestic Product (GDP) size of $3.63B (2018 Rank: 160), a growth rate of 4.1 per cent in 2018 and 4.6 per cent in 2019, Guyana’s economy is expected to grow by 33.5 per cent and 22.9 per cent in 2020 and 2021 respectively.
Those projections are contained in a report from the International Monetary Fund (IMF), which stated that Guyana’s real Gross Domestic Product (GDP) is expected to grow by approximately 86 per cent in 2020, almost 20 times more than the projected 4.4 per cent growth for this year.
The Economic Commission for Latin America and the Caribbean (ECLAC) has also forecasted a staggeringly-high growth rate for Guyana next year. ECLAC noted that Guyana’s growth rate is pegged at 4.5 per cent for this year, while next year it will be 85.5 per cent.
A report from Bloomberg stated that with such figures, Guyana’s GDP will grow 14 times as fast as China’s next year.
Further projections by the IMF showed that real GDP will grow by 4.8 per cent in 2021, 20.6 per cent in 2022 and 26.2 per cent in 2023. Guyana’s $4B annual GDP is also expected to expand to about $15B by 2024, said the IMF. The financial institution said the commencement of oil production will substantially improve Guyana’s medium and long-term outlook. Guyana is projected to be among the world’s largest per-capita oil producers by 2025.
The oil sector is projected to grow rapidly, accounting for around 40 per cent of GDP by 2024 and supporting additional fiscal spending annually of 6.5 per cent of non-oil GDP on average over the medium term, which will help meet critical social and infrastructure needs.
ECLAC said the Guyana Government will receive approximately 14.5 per cent of all oil revenue in 2020.
In addition to potential oil revenues, there has already been a notable increase in the Foreign Direct Investments here. According to ECLAC, Guyana took in US$495M in FDIs in 2018, which was more than double what it had received in 2017.